ICICI Bank Home Loan Rate: ICICI Bank has increased the home loan interest rates. Many banks have started increasing loan interest rates in the last few months. Along with ICICI Bank, PNB, Bank of India has also revised its MCLR with effect from January 1, 2023. Let us know about it in full detail.

ICICI Bank has increased its marginal cost-based lending rate (MCLR) by up to 25 basis points for all tenors. One basis point is equal to 0.01 percent. The increased interest rates have become effective from January 1, 2023.

ICICI Bank loan rates

According to ICICI Bank's website, the overnight, one-month MCLR rate has increased from 8.15 percent to 8.40 percent. Three months and six months MCLR in ICICI Bank has been increased to 8.45 percent and 8.60 percent respectively. The one-year MCLR has been increased to 8.65 percent.

With the increase in the interest rate on your home loan (both EBLR and MCLR), your EMI payments will also increase. The benchmark to which your mortgage loan is linked will determine when the increase will affect you.

Loan rates of other banks

Many banks have started increasing loan interest rates in the last few months. Along with ICICI Bank, PNB, Bank of India has also revised its MCLR with effect from January 1, 2023.

Can any lender change the loan disbursement system?

  • A borrower can change his home loan from being linked to MCLR to linking to an external benchmark. The borrower has to inform the bank and pay the relevant administrative charges.
  • As per the ICICI Bank FAQ page, “All existing customers have the option to switch from the existing system of FRR/PLR/I-Base/MCLR (FRR/PLR/I-Base/MCLR +/- Spread) to the new system. Repo linked rate (repo + spread) to the prevailing rate applicable for fresh loans with the same category of customer.
  • Will ICICI Bank discontinue the previous benchmark rates i.e. I-Base/FRR/PLR/MCLR?
  • For all new floating rate home/mortgage loans sanctioned from October 01, 2019, the Bank will offer only repo rate linked loans. However, the existing loans will continue to be repaid at the respective PLR/FRR/i-Base/MCLR.
  • What are the charges for prepayment of ICICI Home Loan?
  • Nil with floating rate of interest for home loans, land loans, and home improvement loans.
  • 2% on the outstanding principal plus applicable taxes on full repayment of Home Loan, Land Loan, Home Improvement Loan and Top up on Fixed Rate Home Loan.
  • 2% on the outstanding principal plus applicable taxes on full repayment of Home Loan, Land Loan, Home Improvement Loan and Top up on Fixed Rate Home Loan.
  • Top up on home loan on full repayment of top-up plus applicable taxes at 2% on the outstanding principal* if the end use is for business purpose
  • Nil for Non-Home Loan** with floating rate of interest and end use other than business purpose.
  • On full repayment of non-home loan** with applicable tax at 4% on the outstanding principal amount* if the end use is for business purpose
  • On full repayment of non-home loan** with applicable tax at 4% on the outstanding principal amount* if the end use is for business purpose
  • 4% plus applicable taxes on the principal outstanding on full repayment of the non-home loan** with a fixed rate of interest.